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Opportunities for the Colombian Amazon

POLICY PAPER by Ana ma ria Ari st iz ab al , Ju ne 20 09 1

The Colombian

Amazon

Policy

Paper

hopes

to

be

a starting

point

for

discussions

with

various

stakeholders

regarding the post‐conflict vision for the Colombian Amazon. The document is a work in progress. After giving

a very brief overview of the current situation and a case for action, this document hopes to provide a

preliminary picture of where the conversation is with respect to a vision for the Amazon, outline the most

striking opportunities in the realm of sustainable development, and propose steps forward.

The document aims to encourage the international community and Colombian society in general to take action

with respect to the Colombian Amazon. The time is ripe to join forces, uncover common agendas, and engage

a variety of stakeholders in creating a vision for the sustainable development of the region. The development

threats will be strong as the conflict starts to subside, leaving the Amazon subject to a variety of conflicting

interests. The

Amazon

has

enormous

potential

to

contribute

to

the

solution

of

global

scale

problems,

such

as

climate change and biodiversity loss, for which the international community must advocate. There are new

market instruments and political will to make this happen. This Paper hopes to provide a few pointers in what

hopefully will be a large scale process that contributes to real solutions and commitments from various groups

and organizations on behalf of this unique biological and cultural ecosystem.

1. The value of the Colombian Amazon

Colombia has established its urban centers and development initiatives mainly in the Andean Region and the

Coast. Historically,

this

has

framed

people’s

mind

to

disregard

the

rich

resource

that

constitutes

the

Amazon.

As the Geo Amazonia report states, “there is a very minimal presence of the State in the Amazonian region

because it has always been considered an inhospitable region of low priority”. This is slowly changing, as the

general population realizes the enormous potential that this region holds.

The Colombian Amazon has a considerable size, over 47 million ha, corresponding to

41.7% of the Colombian territory, encompassing 10 departments, and 6.8% of the

total Amazon area. The Amazon has a rich biodiversity and cultural diversity, with

70% of animal and vegetable species of the world, and 62 indigenous cultures. The

region has a population of almost one million inhabitants, corresponding to 2% of the

national population.

Of

this

group,

9%

corresponds

to

indigenous

populations

and

3%

to afro‐Colombians.

1 'This discussion document, though commissioned by the Embassy, does not necessarily reflect the Embassy's public or

political position. The Netherlands Embassy is a large scale donor in environmental policy, notably through budget

support for the Ministry of Environment, as well as additional programs and projects.

Figure 1: The Colombian Amazon (in green), covering 10 departments (Wikipedia).



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The Colombian Amazon has global importance. It has outstanding

potential to mitigate climate change, and to preserve biodiversity and

cultural diversity. As we can see in table 1 below, Colombia’s annual

deforestation

rate

of

942km2/year

is

relatively

low

in

the

region.

Peru,

Bolivia, and overwhelmingly Brazil (by a factor of 10) face substantial

development pressures. According to the SINCHI institute, in 2001,

around 95% of the Colombian Amazon was considered natural or

minimally transformed. The coverage was distributed as follows: natural

forests 43,311,755 ha (90.75%); cultivated pasturelands 2,186,524 ha

(4.58%); natural grasslands 833,232 ha (1.75%); bodies of water 535,614

ha (1.12%); and the remaining area, with less than 1% is divided into

scrublands, secondary vegetation, annual or transitional crops,

heterogeneous agricultural areas, and urban areas. 2 The relatively small

deforestation rate

is

due

to

causes

that

we

will

explain

below.

This

slow

deforestation rate positions the Colombian Amazon to be a premium

vehicle to address climate change.

The Colombian Amazon is unique in the world, due to the presence of a

number of instruments geared for conservation. In its territory, the

Amazon harbors 179 indigenous reserves, encompassing over 25 million

hectares, representing around 60% of the total Amazon area. The

importance of these is discussed in the side bar to the left.

The region also has 16 protected areas, occupying over 7 million hectares,

or 17.2%

of

the

territory.

Protected

areas

in

Colombia

have

played

a very

important role in conservation. The Yale Sustainability Index provides the

indicator of Effective Conservation, measuring the percentage of habitat

inside protected areas that is actually intact (as opposed to “paper

parks”). This indicator places Colombia second among the megadiverse

countries. Without a doubt, protected areas have been essential to fulfill their conservation role.

Among both modalities (which in some cases overlap), over 30 million Ha3, that is 73.7% of the total

Colombian Amazon area is under some sort of protection. This was the notable result of a number of policies

and laws passed in the 70s and 80s to protect indigenous rights, and to assure the conservation of natural and

cultural resources.

This

circumstance

is

favorable

for

the

connectivity

of

ecosystems

and

thus

a more

viable

2 OTCA, 2008

3 Foro Nacional Ambiental, 2008

“Indigenous territories form the

most important barrier to Amazon

deforestation. Indigenous land occupies a much larger area than

the parks in the entire Amazon. Conservationists

may

argue

that

indigenous peoples will cease to

protect forests as their contacts with a market society increase, but Nepstad et al. (2006) found that virtually al l indigenous lands substantially inhibit deforestation

up to 400 years after contact with

the national society. There was no

correlation between population

density in indigenous areas and the

inhibition of deforestation. In a

large part of the Amazon, forest protection

can

be

reconciled

with

human habitation and sustainable

management – it would not happen without the people. We

therefore recommend strengthening protected area

management and the creation of new protected areas ahead of the

agricultural frontier. Furthermore, the rights of indigenous peoples over their land should be

recognized and the capacity of indigenous organizations to

manage their

own

territories

should be strengthened.”

-WWF 2009



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preservation of species, as well as the viability for a number of rich indigenous traditions and knowledge of the

natural world.4

Table 1: Comparative forested areas and deforestation rates5

COUNTRY

ACCUMULATEDEFORESTED AREA(km²) 2005

% TOTAL

DEFORESTED AREA

2005

ANNUAL

DEFORESTATION

(km²/year) 2000‐

2005

BRAZIL 682.124 79,50% 22.513

PERÚ 69.713 8,20% 123

BOLIVIA 45.735 5,30% 2.247

COLOMBIA 29.302 3,4%, 942

VENEZUELA 12.776 1,50% 553ECUADOR 8.540 1,00% 388

GUYANA 7.390 0,90% 210

SURINAM 2.086 0,20% 242

TOTAL 857.666 100% 27.218

The Colombian Amazon provides a host of additional environmental services, such as climate regulation,

hydrological stabilization, nutrient retention, fire protection, pollination, disease regulation, and timber, and

non timber forest products. These environmental features have global significance. As the Prince of Wales’

Rainforest

Project

Report

claims,

“Reducing

tropical

deforestation

will

be

vital

if

the

world

is

to

avoid

catastrophic climate change and preserve important ecosystem functions. (…) Rainforests cool the planet,

regulate the water cycle and provide a home to countless species; it is right and essential that the world pays

for these services.”

Of prime importance is the role of the Amazon in regulating the climate and mitigating climate change. Given

the ecological properties of this biome, the Amazon has an established equilibrium among its forests, water,

and climate. The result of a high rate of evapo‐transpiration, otherwise termed as “water recycling” results in a

cooling and stabilization of the regional climate. The same thing occurs at global scale. The Amazon is quoted

as “the largest air conditioner in the world”. It has enormous capacity for heat absorption, water retention and

rain,

amounting

to

a

water

recycling

rate

between

20

and

50%.

6

Additionally,

the

forests

function

as

massive

storage sinks for carbon. All of the above, along with a large body of evidence explain the link between the

Amazon and global climate change. However, as much as the link can have a beneficial influence on the global

4 There is also the land use designation of forestry, which also holds the potential to contribute to conservation. (Andrade,

2008) 5 OTCA, 2008

6 Andrade, 2008



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climate, it can also have a detrimental one. Carbon stored can quickly be released in the atmosphere as a

result of deforestation or forest fires, and cooling effect can be overturned as the region threatens to turn into

a savannah or even suffer desertification processes after its delicate balance has been lost. 7

2. The urgency

of

envisioning

the

post

-conflict

Amazon

In spite of the conservation instruments in the country, the

Colombian Amazon is vulnerable to development pressures both

current and future. Currently, the Amazonian departments of

Putumayo, Caquetá, Nariño, Meta, Cauca, and Guaviare face the

most land use change and transformation of their forests. Cattle

ranching and agriculture are the prime target uses, due to

processes of spontaneous, ‐or non planned‐ colonization. In many

cases,

most

notably

in

Guaviare

and

Putumayo,

this

colonization

is

associated to illicit crops such as coca and poppy.8

In addition to these current pressures, the most severe of them are still to come, opening up the departments

of Vaupes, Guainía and Amazon for deforestation (see map in figure 1)9. There have been circumstantial

disincentives to develop the region. These disincentives are related to the multi‐dimensional conflict that

afflicts the country and to the cultivation of illicit crops, which paradoxically and non‐intentionally have helped

maintain relatively reduced rates of deforestation. On the one hand, it has kept investors from coming to the

region, because of the lack of government presence, the presence of illicit activities, and the perceived threat

of terrorist

attacks.

On

the

other

hand,

it

has

provided

a profitable

economic

alternative

that

uses

less

land10.

While one hectare of coca generates around $27 million pesos/year (around $11,000 USD)11, a conventional

farming activities (agriculture and cattle raising) is of $123.765 pesos/year.12

Circumstances are bound to change. In an effort to bring the armed conflict to an end, Colombia is investing

considerably in strengthening the presence of the government in areas like the Amazonian departments of

Meta and Caquetá. Under its “Consolidation Plan”, the government has been testing a methodology to

increase the legitimacy and effectiveness of government presence through sequenced interventions involving

the military, the police, coca eradication programs, and strengthening of civil service delivery in justice,

education, health and infrastructure promoting the transition towards a licit economic development.

7 Andrade, 2008

8 Sinchi 2006

9 Data in map comes from Sinchi 2006

10 Juan Pablo Ruiz, Personal communication

11 UNODC, 2004

12 Figures: Ruiz, S et all, 2007. Note: This is not to say that illicit activities such as coca cultivation have not caused serious

damage at social and political levels.

“I t is necessary to have a

strategic vision on th e

exploitation of Am az on ia,

which recognizes an d values

th e heterogeneity of its

natural, human an d cultural

resources”

- AC TO , GeoAmazonia R e o r t



Figure 1: Colombian Amazonian departments by deforestation rate. (Data from Sinchi, 2006)

The day illicit activities are no longer viable, in order to obtain the same profit as coca, conventional farming

activities will need 219 times the amount of land used by coca. The need to generate similar levels of income

that

coca

cultivation

can

cause

dramatic

deforestation.

Additionally,

illicit

crops

have

caused

an

artificial

economy attracting the presence of population, which without coca their presence in certain territories would

not be viable. Due to the remoteness and small size of the population, government presence in these areas

would be costly and unfeasible, unless new opportunities are available. We will talk about some of these

opportunities in the next section, which could provide sizable funding not only for conservation of the

rainforest, but for the social and economic development of the region.

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3. Opportunities on the table

Preventing deforestation is essential for maintaining safe levels of CO2

emissions. 17% of global CO2 emissions come from deforestation,

compared to

13%

for

transport

sector.

Indeed,

as

the

latest

McKinsey

& Company research has shown, on current trajectories, without

including the conservation of forests in the short‐term, it will

effectively be impossible to achieve climate stability.13

Before, forests were not considered part of an attractive development

plan. Now, given the increased concern for climate change and

sustainability in general, there are markets and instruments that place

value in forests, making them a viable element in a development

strategy. These include the Clean Development Market (CDM) and

voluntary

carbon

markets,

the

possibility

of

a

Reduced

Deforestation

and Degradation – “Avoided Deforestation” (REDD) both as part of the

Kyoto Protocol post 2012 or a voluntary market, payment for

ecosystem services (PES)14 schemes, sustainable forest product

markets, including certified wood, and non timber forest products,

among others. According to recent valuations, this set of services

represent an approximate value of $ $426 ‐700 USD per hectare per

year, which for the entire Colombian Amazon under natural parks or

indigenous reserve regime (30 million ha), represents between 10 and

20 billion USD per year15.

REDD is currently considered one of the highest potential instruments

to prevent forest loss. Under this scheme, governments and/ or

companies compensate developing countries for reducing emissions

related to forest loss and forest degradation, in post‐2012 climate

regimes. During the 2007 climate conference in Bali, countries agreed

to start REDD pilot projects. There are other modalities under

implementation: certain countries have opted for non‐Kyoto Protocol,

national level REDD‐type payment schemes, as in the case of Costa

Rica, discussed below. There is also a project based REDD in

formulation by the Fondo para la Acción Ambiental y la Niñez, also

discussed below. Overall, REDD initiatives hold great promise, as

stated by the WWF‐Netherlands report “Nepstad (2007b) states that

REDD‐related financing has the potential to become the largest

13 http://www.rainforestsos.org/

14 For a simple definition of REDD and PES see side bar in the next page.

15 Beukering P et al, (2007) and Ruiz, S et all, 2007

Some helpful definitions

CDM: “Clean Development Mechanism

is an arrangement under the Kyoto

Protocol allowing industrialized

countries with a greenhouse gas

reduction commitment to invest in

projects that reduce emissions in

developing countries as an alternative

to more expensive emission reductions

in their own countries.” ( Wikipedia)

REDD: “Reduced Emissions from

Deforestation or Degradation” often

referred to “Avoided Deforestation”

refers to commitments at national or

regional/project scale to reduce

deforestation rates with respect to an

agreed -upon baseline, for which there

is a corresponding payment from a

REDD Fund. While originally excluded

from the Kyoto Protocol, it is suspected

to be included in its successor”

( Wikipedia )

PES: “Payment for Environmental

Services” is a transaction between a

buyer and a seller of a well defined

environmental service. The most

common PES schemes are the carbon

markets (both voluntary or official -as

part of the Kyoto Protocol), wetlands

mitigation, and payments for water

services.



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financial flow into tropical forest conservation. According to this author, carbon finance at US$ 5 per ton or

less could tip the balance from non‐sustainable use towards sustainable forest management over 96% of the

(…) Amazon.”

These PES and REDD incentives are already being considered in Colombia. A policy document, the CONPES,

was

formulated

in

2003

to

encourage

the

PES

business,

mainly

under

CDM.

Some

results

can

already

be

seen,

with respect to forest‐based CDM, PES, and REDD.

Under the CDM, there is a forestry project in validation phase, called Procuenca. The CDM market promises to

bring more business. The national level REDD roundtable is currently formulating a proposal to be submitted

to the Carbon Finance Unit of the World Bank, in charge of managing

funds donated for the purpose of a REDD system. The proposal and

associated studies are being done with funds from a small grant

received by selected countries who in turn are eligible, based on the

merits of their proposal, to $6 million USD seed money to establish a

national REDD program.

In parallel and independently, the Fondo para la Accion Ambiental y

la Niñez (FAAN) is currently in discussion with indigenous

communities in the Colombian Amazon regarding a REDD project to

cover at least 50,000 hectares, where the FAAN would provide

payment according to measured CO2 absorption and periodic

monitoring. The specifics of the payments and the duration of the

contract are currently under review.

Aside from CDM and REDD initiatives there is an emerging market for

PES. There

are

many

examples

of

PES

for

water,

which

function

well

at local level, where companies pay landowners for the watershed

services to provide clean water. There are also a number of examples

of PES for carbon, which fall under the voluntary carbon market. A

notable effort is being carried out by another environmental fund,

the Fondo Patrimonio Natural, which received US$6.8 million from

the Dutch cooperation to formulate and implement PES projects in

various regions, in particular indigenous reserves. In different regions

of the country PES projects are being tested. A more complete

national strategy for PES is under approval at this moment.

The vast majority of the voluntary carbon market transactions occurs “over the counter” and are not easily

monitored. However, there is currently a GEF project being formulated by the Colombian non profit Fundación

Natura which aims to create a Colombian Carbon Exchange Mechanism (CCEM)16, which would consolidate all

CDM and voluntary carbon transactions under a national registry, approve and verify projects, and provide

additional services, such as technical assistance to entities for project formulation, incentives for companies to

16 This is not the oficial accronym, but it is used for practical purposes in this document.

“Killeen mentions that the largest economic asset of Amazonia is its carbon reserves, which are estimated at a value of US$2,800 million, if it were

monetised at current market values. For example, if the Amazonian

countries would accept to reduce

their rates of deforestation by 5% per year for thirty years, this could qualify as a reduction in greenhouse gases and generate around US$6,500 million

annually during the life of the

agreement. Distributed on an equitable

basis among approximately 1,000

Amazonian municipalities, that amount would be equivalent to nearly US$6.5 million per year per community that could be duly invested in health and education, which

are priority requirements for most of these communities (Killeen and Da

Fonseca 2006). Although

this option of selling carbon services is not yet totally developed and some of the countries have reserves about entering into this system, it is a good opportunity for posting a referent for the region’s potential value”

- ACTO, GeoAmazonia Re ort



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purchase credits, and conflict mediation in case of dispute. The CCEM aims to guarantee at least 10,000 ha of

avoided deforestation, 50,000‐10,000 of tons of CO2 mitigated, and 20 companies committed to being carbon

neutral.

Supporting these initiatives, there is a promising policy tool, a CONPES for the Colombian Amazon, being

formulated.

CONPES

is

a

national

level

planning

instrument.

Its

goal

is

to

establish

strategic

guidelines

for

the

sustainable development of the Colombian Amazon region that 1) allow the formulation and implementation

of planning instruments, for the municipal, departmental, and regional levels, and 2) present management

alternatives for the region to confront the challenges it faces of great cultural and biological richness paired up

with preoccupying poverty levels and ecological vulnerability.

Specifically, the CONPES aims to strengthen institutional capacity to exercise better planning over the region.

Aside from providing environmental guidelines for the land use planning exercises, the resulting institutional

framework will coordinate with donors and funding mechanisms to channel funds for the region. Land use

planning and coordination of donors are key actions to generate large scale solutions for the Colombian

Amazon region.

In spite of these efforts, Colombia is lagging behind other countries who have achieved more impressive

results in this field to date. Costa Rica has been a global leader since 2005 when it implemented its PES

program, claiming 250,000 ha of forests under conservation payments. The country is currently scaling up its

efforts by structuring an additional $90 million dollar PES fund with GEF, World Bank, and national money,

coming from a national tax on gasoline. As Juan Pablo Ruiz points out, with a twinge of embarrassment, that “a

country 20 times smaller than ours has a PES program six times larger”17.

Indonesia and Brazil are also playing a leadership role in the REDD arena. Indonesia’s government is finalizing a

draft on Kyoto based‐REDD implementation guidelines. It will be a market‐based mechanism, driven by

demand for

certificates

by

developed

nations.

As

for

Brazil,

in

August

2008,

the

Brazilian

Development

Bank

created the Amazon Fund with a US$100 million donation grant from the Norwegian government. The

Brazilian government hopes to raise an additional $1 billion within a year and as much as $21 billion by 2021 to

strengthen the fund18. Norway has already committed up to one billion dollars by 2015 provided Brazil meets

its targets for reducing deforestation19. The Amazon Fund is set up to compensate projects that have

contributed to lowering deforestation levels. Contrary to the CDM markets, these payments occur ex‐post,

that is, after the avoided deforestation has been measured and verified, with respect to an agreed upon

historical baseline. Instead of carbon credits, donors receive “Rainforest Diplomas”, which are non‐tradable.

Brazil hopes the Amazon Fund will be a model to be replicated by a Global Deforestation Fund. The fund would

pool

together

the

payments

from

industrialized

nations

to

be

then

distributed

to

countries

that

can

prove

improvements in reducing deforestation levels. The fund could benefit countries at two leves: 1. Countries that

are ready to start, and 2. Countries that need capacity building to be able to receive payments in the future.

The funds for capacity building could come from institutions like the World Bank and voluntary donors in

17 Ruiz, J.P, (2009)

18 Briand, X, (2008)

19 WWF, (2007)



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developed countries. The buyers in developed countries would not receive conventional carbon credits under

the arrangement. Instead they would be receive non‐tradable "certificates".20

The Brazilian proposal is in line with research that claims that the carbon markets along will not address the

problem timely and at the appropriate scale. The 2008 Eliasch Review on financing global forests estimates

that

US$17‐

33

billion

must

be

invested

annually

to

halve

greenhouse

gas

emissions

from

deforestation

by

2030. One scenario modeled suggests that the global carbon markets could supply around US$7 billion per

year to reduce deforestation by 2020. There is a gap of 11‐19 billion per year. The suggestion is that the

funding come from governments, multilaterals and donors. An example is Norway’s Climate Change and

Forestry mechanism, which has an initial budget of US$2.5 billion for the next five years

The Prince of Wales also makes a strong case for deforestation prevention, led by the international

community. “An Emergency Package is needed to provide substantial funding to Rainforest Nations to help

them address the drivers of deforestation and embark on alternative economic development paths.” The

Prince proposes the creation of an Emergency Package where donors join forces and create a program for

Payments for Rainforest Nations. These payments would be structured under 5 year service agreements, with

clear performance targets. The scheme would work with full cooperation from rainforest nations, who would

define priorities to be funded by the package. Similarly to the Brazilian Amazon Fund, these priorities could

initially include capacity building and policy development activities that reverse the deforestation trajectory,

strengthening forest monitoring and enforcement systems, providing incentives to private individuals,

communities, and enterprises to sustainably manage existing forests, to plant new forests, to shift agriculture

to available non‐forested land, and to increase and sustain yields on existing agricultural land, creating

Payment for Ecosystem Services (PES) schemes for landowners, and investing in general economic

development projects such as infrastructure, enterprise finance and education.21

All in all, it is clear that there are many new opportunities to further assess in terms of their effectiveness and

scalability in

the

Colombian

Amazon

context.

At

first

glance,

these

opportunities

promise

to

provide

a number

of income generating activities originating in ecosystem services that would benefit the local populations. At

the same time, these initiatives can help halt the receding agrarian frontier, by providing real alternatives to

conventional farming practices that lead to deforestation, in protected areas among others. These activities

have been monetized and summarized in the table below. As mentioned earlier, the research points out that

the bundling of these services could amount to $426 ‐700 USD per hectare per year, which multiplied by the

possible number of forested hectares signifies the extraordinary amount of 10‐20 billion per year. The on the

ground implementation effectiveness of these PES and REDD schemes is still to be confirmed, but given the

increased global interest in the role of the Amazon in stabilizing the climate and providing needed

environmental services, the prospects are pretty good.

20 Mongabay.com, (2008)

21 http://www.rainforestsos.org/



Table 2: Estimated economic value of selected Amazon ecosystem services. Source: WWF 2009

4. Conclusions and proposed next steps

Colombia’s Amazon is unique in many ways, given the level of preservation of its forests, in large part due to

the percentage of land under protected area or indigenous reserves regime, and paradoxically, given the

conflict, which serves as a development disincentive. These circumstances result in connectivity of ecosystems

and one of the lowest deforestation rates in the region. The international community has a keen interest in the

fate of the Amazon. Given the imminent threats of climate change and massive species extinctions, the

preservation of rainforests is of primary global importance. There are compelling new opportunities and

strategies to fund conservation, due to the keen interest of donors to preserve rainforests as an essential

climate change mitigation strategy.

There is also the availability of new market instruments aiming for the same, such as REDD, official or

voluntary carbon markets (including CDM), and PES that deserve further study and projects to assess its real

potential. These instruments illustrate a new paradigm in solving climate change and preserving rainforests

like the Amazon. What these have in common is to use the force of markets to provide suitable solutions,

given that the markets are starting to put real value in dollars to what the Amazon can contribute to the world.

In addition, there is the clarity that small or even decently sized initiatives will not amount to what it is needed

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to halt the enormous threat of deforestation and the resulting warming of the planet. To work, these

initiatives will have to come with capacity building for the implementing communities and supporting

institutions.

Given the magnitude of the challenge and the attractiveness of the opportunities to promote and implement a

vision

of

a

sustainable

Colombian

Amazon,

it

is

necessary

to

coordinate

actions

amongst

different

donors.

A

strategy for action22 could include creating an Amazon Donor Roundtable (ADR) to pool together resources

from the international community for the benefit of the Colombian Amazon, similarly to what is proposed by

the Prince of Wales and what is being done in Brazil. The ADR would be composed of selected multilateral,

bilateral, and philanthropic actors interested in the Amazon. This ADR could facilitate and support discussions

amongst the relevant stakeholders in the region, for a more comprehensive pooling of knowledge and

information of the Amazon, the uncovering of common agendas, and the creation of a concerted vision for a

post‐conflict Amazonia. As this process unfolds, the ADR will develop a strategy based on the inputs of the

consultations and the prioritization of the most high‐impact actions, and provide funding to support the

emerging vision.

22 To see a proposed Action Plan, visit Annex 1.



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